Q4 2025 Magnera Earnings Call

To ask a question during the session will need to press star one on your telephone you will then hear an automated message device in your hand is raised to withdraw your question. Please press star one again, please be advised today's conference is being recorded.

Curt Begle: In some cases, seeing some growth in geographies that we hadn't historically looked at. That's been a good job by our sales forces across the globe. We look at consumer solutions. We comment on the fact that the mix of our portfolio is shifting from 51% to 53% in consumer solutions. As you look at it, it's difficult sometimes to see the forest through the trees. We try to really bucket those into major segments. We've talked about wipes. We have a great franchise inside of our consumer solutions space, both our own branded products for dry wipes that goes into institutional services and distribution channels with Centera and Chickapee.

I would now like to turn the conference over to your Speaker today, Robert while Mr. Please go ahead.

Thank you operator, and thank you everyone for joining <unk> fourth fiscal quarter of 2025 earnings call. Joining me I have <unk>, Chief Executive Officer, Curt Bailey and Chief Financial Officer, Jim Pill. Following our prepared remarks, we will have a question and answer session to allow everyone the opportunity to participate.

We ask that you limit yourself to one question with a brief follow up then fall back into the queue for any additional questions.

A few things to note before handing over the call on our website at <unk> Dot Com you can find today's press release and earnings call presentation under Investor Relations.

You can also go directly to IR dot <unk> Dot com to review the Investor presentations from our recent conference attendance.

Curt Begle: As you look at our broad portfolio globally within differentiated substrates inside of our portfolio, our spin-laced technology continues to be preferred by the consumer and a great product and delivery for our customers, as well as we round out with air-laid and spun-laced technologies, which I think you have a little bit of an idea now that you've had a chance to visit one of the sites. We're able to kind of capture general surface cleaning, general personal care cleaning, and then also the institutional dry wipes goods. We're excited about that. I talked about electrification initiatives. Our cable wrap business continues to build momentum through projects, green energy projects, and high-voltage cable needs. That product line, we believe, is again another great niche application where we have some unique value propositions there.

As referenced on slide two during the call we will be discussing certain non-GAAP financial measures. These.

These measures are reconciled to the most directly comparable GAAP financial measures in our earnings press release and in the appendix of the presentation available on our website. Additionally.

Additionally, a reminder, that we will make certain forward looking statements. These statements are made based upon management's expectations and beliefs concerning future events impacting the company and therefore are subject to risks and uncertainties.

Actual results or outcomes may differ materially from those expressed or implied in our forward looking statements.

Some factors that could cause the results or outcomes to differ are in the company's latest SEC filings and our news releases. These statements speak only as of today and we undertake no obligation to update them I will now turn the call over to <unk> CEO Curt Bailey.

Curt Begle: On the infrastructure side, while you may see some softness in different parts of the world, the broad part of our portfolio is not just the building construction wrap, but it's some of the other products that we've highlighted as a nice complement to those kind of total systems solutions for contractors and various distributors alike. We continue to lean in on that front. I don't want to be remiss if I didn't talk about some of the filtration projects we have, particularly when we think about the beverage space. The one thing that we've really grown to appreciate over the past year is how significant and how trusted the sites that we had acquired are in that space. Very high-quality demands, as you can expect.

Thank you Robert Good morning, and thank you for joining our call I'm pleased to present, our fourth quarter results and discuss the significant progress achieved as we marked our first anniversary as being narrower.

During this update I would like to emphasize three key takeaways first our strategy to establish ourselves as a leader in advanced specialty materials is yielding positive results our.

Our global stature as an innovative organization with substantial scale and strategic geographic presence has enabled us to consistently succeed in the current bid cycle with top tier customers, we've been able to gain share in markets and product segments of our choosing.

The macroeconomic conditions across our operating regions remained challenging with a cautious outlook as we begin fiscal year 2026.

Curt Begle: More importantly, our ability to service and deliver for those customers is something that we really pride ourselves on and look to continue to improve in certain areas. There are demands on being on the front end of the ever-changing needs in the markets on compostable opportunities and addressing the customer's requirements from their ESG metrics, but more importantly, the safety and security of the products that they're putting in the market. Make no mistake, across the board, we have to maintain the highest quality levels, highest service levels, not only of who we do business with, but the applications, the end-use applications that we supply to. We are touching skin. We are in the operating room. We are protecting babies, adults, etc.

Third our focus remains uncontrollable factors, we have made measurable improvements in our synergy run rate performance and have already demonstrated substantial advancement with project core introduced last quarter.

The magnesia team delivered robust results to close the fiscal year, achieving $839 million in sales and adjusted EBITDA of $90 million for the quarter.

For the full year revenues reached $3 2 billion with an adjusted EBIT standing at $362 million, we generated $126 million of free cash flow, representing a yield exceeding 30%.

Second, the macroeconomic conditions across our operating regions, remain challenging with a cautious Outlook. As we begin, fiscal year 2026,

Wish to express my gratitude to our teams who have collaborated effectively stabilized our organization developed optimization plans and taken decisive actions positioning us for continued success.

Curt Begle: That's something that we take very seriously, but also something that, again, is a differentiation for us in a space that, again, can be very competitive at times, but we are the trusted and reliable player in the geographies that we serve.

Third, our focus remains on controllable factors. We have made measurable improvements in our Synergy run rate performance and have already demonstrated substantial advancement with Project Core, introduced last quarter.

These financial outcomes were underpinned by several notable successes with our customers in a subdued personal care market, we experienced ongoing product mix enhancements as consumers increasingly opted for premium softness and comfort.

the Magna team delivered, robust results to close the fiscal year, achieving 839 million in sales and adjusted ibida of 90 million for the quarter.

Kevin McCarthy: Thank you for that color, Curt. My second question relates to free cash flow. I thought you did a nice job generating cash and deleveraging in the quarter. Specifically, can you unpack the forward-looking free cash flow range of $90 million to 110 million in 2026? Just looking for your thoughts on things like cash costs for integration and Project Core, what you're baking in for working capital, cash taxes, and other items you may care to call out.

For the full year, revenues reached $3.2 billion, with an adjusted EVA standing at $362 million.

Our adult incontinence products experienced mid single digit growth through increased adoption rates and our customers increasingly seeking innovative features similar to those found in baby care items.

Of free cash flow representing. A yield exceeding 30%.

Within consumer solutions increased demand for wipes and infrastructure contributed to our segments portfolio, increasing from 51% to 53% of our total revenue.

I wish to express my gratitude, to our teams who have collaborated, effectively stabilize, our organization developed optimization, plans, and taken decisive actions. Positioning us for continued success.

These Financial outcomes were underpinned by several notable successes with our customers.

Our consumer solutions portfolio utilization is tracking nicely with growth projects and targeted asset upgrades.

In a subdued Personal Care Market. We experienced ongoing product mix enhancements, as consumers, increasingly opted for premium softness and comfort.

Jim Till: Sure. Thanks, Kevin. Absolutely. You start at the top of the house with the EBITDA, and then we've highlighted the $80 million of capital expenditures, which includes $10 million of IT-related integration costs. On the integration and tax question, there's roughly $20 million of core. We have in the range of $30 to 35 million for cash taxes. We've sort of highlighted that 10% to 11% of EBITDA, but we have some projects we think can offset that next year to help lower that number a little bit. The remaining is just our normal integration as we're in year two of sort of a three-year path. The overall total of that category is roughly $80 million. We've highlighted that on slide 12 to help you with the walks.

<unk> of infection prevention, wipes rose, 10% year over year with balanced growth from both branded and private label customers.

Demand for convenience surface cleaning and disinfecting remains strong across households, and institutional use.

Our adult incontinence products experience. Mid single-digit growth through increased adoption rates and our customers increasingly seeking Innovative features. Similar to those found in baby care items.

Our strong positioning in cable rap and specialty solutions has benefited from ongoing electrification and infrastructure growth worldwide and.

Within consumer Solutions, increased demand for wipes and infrastructure contributed to our segments portfolio increasing from 51% to 53% of our total revenue.

In response to growing sustainability requirements, we have provided advanced material solutions for wipes tea and coffee filtration and can postal offerings for in home and away from home usage.

Our consumer Solutions portfolio, utilization is tracking nicely with growth projects and targeted asset upgrades.

Looking forward to 2026, we anticipate in an earnings improvement of approximately 9% driven by synergy realization project core initiatives and further advances in product mix and innovation.

Sales of infection prevention, wipes Rose. 10% year-over-year with balanced growth from both branded and private label customers.

Kevin McCarthy: Okay. Is working capital, Jim, expected to be a smallish number?

Demand for convenience surface cleaning and disinfecting remain strong across households and institutional use.

Jim Till: Sure. Yeah.

Kevin McCarthy: How would you characterize that?

The company has successfully completed its stabilization phase following our formation and maintained uninterrupted delivery of premium products to our customers over the past year.

Jim Till: I apologize. Right. Working capital, we assume flat. We have some items that came in at the end of the quarter this year that were one-time benefits. Roughly $10 million of that benefit will offset in next year. We do have some items as we go off of legacy GLT terms, the remaining portion that should offset that. We would assume flat for next year.

Our strong positioning and cable wrap, and specially Solutions has benefited from ongoing electrification and infrastructure growth worldwide.

Now entering the optimization phase of our transformation, we are cultivating an innovative culture aligned with our commitments to our customers.

In response to Growing sustainability requirements. We have provided Advanced material solutions for wipes tea and coffee, filtration and compostable offerings for in-home and away from home usage.

Our commercial teams have been integrated to ensure consistent service operational metrics and processes are being standardized and efficiency initiatives are underway throughout the organization. We continue to be action oriented with our purpose promise and beliefs, providing our guiding compass.

Kevin McCarthy: Excellent. Thanks, and good luck to you guys.

Curt Begle: Thanks, Kevin.

Jim Till: Thanks, Kevin.

Operator: One moment for our next question. Our next question comes from Roger Spitz with Bank of America. Your line is open.

Looking forward to 2026. We anticipate in an earnings Improvement of approximately 9% driven by Synergy, realization project core initiatives and further advances in product, mix and innovation.

Curt Begle: Thank you, and good morning. Maybe I missed it, but for fiscal 2025 overall, on a pro forma basis, what was the volume growth?

At this point I will conclude my opening remarks, and invite Jim to provide a detailed overview of our financial performance.

The company has successfully completed, its stabilization phase following our formation and maintained uninterrupted, delivery of Premium products to our customers over the past year.

Thank you Kurt and good morning, everyone.

Before we dive into our results I want to remind everyone that when we compare our performance to the prior quarter. All the prior period figures are adjusted on a constant currency basis to eliminate the impact of exchange rate fluctuations. Additionally.

Curt Begle: Yeah, thanks, Roger. I think we finished right about 3% negative, 3.5%. That was for the Americas. The decline was really because of the South America challenges that we had faced from a competitive standpoint. Europe was roughly 4%. In total, tonnage sold right about the 3.5% to 4% negative for the year.

Now, entering the optimization phase of our transformation, we are cultivating an innovative culture aligned with our commitments to our customers.

Additionally, last year's results incorporate the full impact of the merger.

Our commercial teams have been integrated to ensure consistent service. Operational metrics and processes are being standardized, and efficiency initiatives are underway throughout the organization.

For those interested in the details the reconciliations between our adjusted and reported results are included in the appendix of today's presentation.

We continue to be action-oriented with our purpose, promise and beliefs, providing our guiding compass.

Now turning to our financial results on slide nine we delivered performance that aligns with the expectations that we shared during the previous quarterly call volumes and earnings came in as anticipated while cash flows exceeded our projections, reflecting the strong execution and discipline of our global teams.

Curt Begle: Got it. Thinking about fiscal 2026, you're up 9% year over year. How should we think about the quarterly tempo of outperforming the 2025 fiscal quarters?

At this point, I will conclude my opening remarks and invite Jim to provide a detailed overview of our financial performance.

Thank you, Kurt and good morning, everyone.

before we dive into our results, I want to remind everyone that when we compare our performance to the prior quarter,

Our teams have done an exceptional job advancing synergy realization since the merger implementing new robust cost reduction initiatives and optimizing our product mix capacity and allocations across the portfolio.

all the prior period figures are adjusted on a constant currency basis to eliminate the impact of exchange rate fluctuations.

Curt Begle: Yeah. We don't provide quarterly details, but what I will tell you is we've highlighted we are on a good trajectory in terms of the synergy realization on the procurement side. I'm really proud of what the group and the team has been able to do from offsetting the standalone costs from the SG&A front. We continue to make good progress just from our overall BECS programs inside of the facilities to offset other inflation. Project Core, as we've communicated, will continue to ramp up throughout the year. We're going to see most of that benefit come in Q3, Q4, but we'll see that phased in and a little bit of an impact this quarter and in Q2.

Additionally, last year's results, incorporate the full impact of the merger.

During the quarter. These efforts helped offset softer baby demand in South America, as well as general market softness in Europe.

For those interested in the details, the reconciliations between our adjusted and reported results are included in the appendix of today's presentation.

Despite the external challenges adjusted EBITDA remained essentially flat for the quarter.

Looking at the full year results fiscal 2025, with a year of disciplined execution strategic progress and solid cash generation.

Now, turning to our financial results on slide 9, we delivered performance that align with the expectations that we shared during the previous quarterly, call volumes and earnings came in as anticipated, while cash flows, exceeded our projections, reflecting the strong execution and discipline of our Global teams.

Our teams delivered strong operational performance advanced merger synergies and maintain financial discipline.

Free cash flow for the year exceeded the high end of our originally provided guidance range, reflecting an intense focus on capex and prudent working capital improvements. The strong cash generation is a testament to the dedication of our operational focus of our teams worldwide.

Our teams have done an exceptional job advancing Synergy realization since the merger implementing new robust, cost reduction initiatives and optimizing our product mix capacity and allocations across the portfolio.

Curt Begle: That's in terms of what we see, not a tremendous hockey stick going into next year, but in general, South America is the big kind of initial lap that we have for Q1, Q2, just because of the business that we were doing last year. We've highlighted that in previous quarters, and those are the negotiations that are taking place right now. We feel like we're very well positioned going into 2026, the back half of 2026 in particular.

During the quarter. These efforts helped offset, softer, baby demand in South America, as well as general Marcus softness in Europe.

Since the merger, we generated $126 million of free cash flow, representing a free cash flow yield of more than 30% relative to our year end market capitalization. This.

Despite the external challenges adjusted Eva remained essentially flat for the quarter.

This performance has allowed us to strengthen our balance sheet and reduce our debt leverage to three eight times at the end of the fourth quarter. We concluded the year with approximately $600 million of available liquidity, providing a solid financial foundation to support strategic investments pursue growth opportunities and maintain flexibility in a dynamic market environment moving forward, we will continue to prioritize string.

Looking at the full year results, fiscal 2025 was a year of disciplined execution, strategic progress, and solid cash generation.

Our teams delivered strong operational performance, advanced merger synergies, and maintained financial discipline.

Curt Begle: Thank you very much.

Free cash flow for the year, exceeded the high end of our original provided guidance, range reflecting, an intense focus on capex and prudent working Capital Improvements.

Operator: Sure. One moment for our next question. Our next question comes from Edward Brucker with Barclays. Your line is open.

<unk> balance sheet and maintaining operational agility move.

The strong cash generation is a testament to the dedication of our operational. Focus of our teams worldwide.

Moving onto my fourth quarter segment reviews, starting with rest of World on Slide 10 revenue declined 3% for the quarter as stronger performance in the select consumer solutions categories was offset by the pass through of lower raw material costs and weaker consumption levels in Europe.

Edward Brucker: Hey, thanks for the questions and congrats on the quarter. Our first one, would you be able to just dive into the demand environment? It sounds like you're being cautious, which is prudent given what we've seen from a bunch of other paper packaging companies. Is it something where it's typical where the consumer is just weaker right now and buying less product, or do you think there's something more structural going on?

Since the merger, we've generated 126 million dollars of free cash, flow representing a free cash flow, yield of more than 30% relative to our year-end market capitalization.

Adjusted EBIT for the segment increased $4 million, reflecting operational efficiencies rigorous cost reduction programs and continued synergy benefits from the integration.

Improvements underscore our resilience of our business model and the effectiveness of our disciplined global operations.

Turning to Americas on Slide 11 revenues were down 9% for the quarter as a result of the pass through of lower raw material costs and competitive pressures from imports in South America for the full year headwinds were partially offset by stronger demand in infrastructure and wipes and markets, which helps stabilize our overall annual results.

Moving forward, we'll continue to prioritize, strengthening balance sheet and maintaining operational agility.

Curt Begle: Thanks for the question. I mean, if you look at the portfolio that we have, these are products that are needed every day, essential goods and products, both on the disposal and durable side. Yes, we listen very intently and closely to our customers, and even through various negotiations of what we can do to help them not only secure business on the shelf, but find ways to cost reduce. That comes from a number of different areas, whether it's new materials that we can provide, a new platform that we can run it on, but also down gauging as they look for high-performance materials at lighter weights. That's been a major point of emphasis. In general, I would say that the European market certainly has more caution to it based on what you're hearing, what everybody is talking about in the space.

Moving on to my fourth quarter segment reviews, starting with the rest of world and slide. 10 revenue is declined, 3% for the quarter as stronger performance in the select. Consumer Solutions. Categories was offset by the pass through of lower raw material costs and weaker consumption levels in Europe.

Adjusted EBITDA in the America segment declined $5 million for the quarter, largely reflecting the volume and product mix challenges in South America. Despite the decline we are confident that our ongoing improvement initiatives and standard synergy realization will support margin recovery in the coming quarters as operational excellence remains a central focus.

Adjusted IBA for the segment, increased 4 million reflecting operational efficiencies rigorous cost, reduction programs and continued Synergy benefits from the integration. These are improvements underscore our resilience of our business model in effectiveness of our disciplined Global operations.

Looking ahead to fiscal 2026, our guidance assumptions are shown on slide 12.

Turning to America's on flight 11, Revenue were down 9% for the quarter, as a result of the pass through of lower raw material costs and competitive pressures from Imports in South America.

At the $395 million midpoint, we're expecting EBITDA growth of approximately 9% year over year. This growth reflects continued synergy realization and ongoing benefits from project core including cost reductions and capacity rationalizations.

For the full year, headwinds were partially offset by stronger, demand, and infrastructure and wipes and markets which helped stabilize our overall annual results.

Curt Begle: As we communicated before, we sell to both branded and private label. Again, as consumers make choices on the shelf, we're there. The one comment that I would make on the personal care front, there's always the concern about baby and whether birth rates are going to negatively impact this business long-term. Fortunately for us, we highlighted it. Our adult incontinence products continue to really expand in terms of the acceptance rate and the need as aging populations are going on across the world. When you talk about form, fit, and function, that's a really important part of our developments with our customers, both from a discretion standpoint, but ultimately a performance standpoint. I could go into a number of different chemistries. We just reviewed some pH levels and helping to avoid rashes, things like that.

In terms of the free cash flow, we expect a range of $90 million to $110 million, including $80 million of capital investments, which includes $10 million from.

Conversion related Capex. This guidance reflects a prudent assessment of the near term environment and a disciplined execution of our operational and financial strategies. This concludes my financial review and I'll now turn it back over to Kurt.

Adjusted IBA and the America segment declined, 5 million dollars for the quarter. Largest is reflecting the volume and product mixed challenges in South America. Despite the decline. We are confident that our ongoing Improvement initiatives in standard Synergy, realization will support margin and Recovery in the coming quarters. Is operational excellence. Remains a central Focus,

Looking ahead to fiscal 2026, our guidance assumptions are shown on slide 12.

Closing 2025, I am pleased with the progress we've made as a new company.

We over delivered on our free cash flow delivered on our updated EBITDA guidance and capex commitments and strengthened our balance sheet.

At the 395 million. Midpoint we are expecting Eva growth of approximately 9% year-over-year. This quote growth, reflects continued, Synergy realization and ongoing benefits from Project core including cost reductions and capacity rationalizations

Looking forward to 2026, we are forecasting an increase in earnings as we continue to leverage our scale unique value proposition and reliability to deliver for our stakeholders.

Curt Begle: In terms of overall demand, I would say consumption rates in various product lines may be a little bit softer in certain geographies, with a little bit more positive demand in others. We see that really by region. Even in the South America markets, where we've had a more challenging run from import price pressure, which we've highlighted, what our customers have, I think, grown to appreciate is our ability to service them and be able to respond in very short order. We're there to service and take care of customers when they need us, but at the same time, making sure that we're getting the value for the products that we're manufacturing and selling. In general, Asia, albeit small for us, is pretty stable. Europe, definitely some concerns, and it's why we provided some of that range.

We are confident in our ability to drive value creation through both EBITDA growth and robust free cash flow generation.

In terms of the free cash flow, we expect a range of $90 million to $110 million, including $80 million of capital investments, which includes $10 million from IT conversion-related capex. This guidance reflects a prudent assessment of the near-term environment and a disciplined execution of our operational and financial strategies. This concludes my financial review, and I'll now turn it back over to Kurt.

Our priorities are clear operational excellence balance sheet strength disciplined capital allocation and strategic investment and growth opportunities. These actions position us to continue building long term shareholder value, while maintaining flexibility in a dynamic global environment.

Closing 2025, I'm pleased with the progress we made as a new company.

We over-delivered on our free cash flow delivered on our updated, ebitda guidance and capex commitments and strengthen our balance sheet.

Operator, please open the line for questions.

Thank you ladies and gentlemen, if you have a question or comment at this time. Please press star one on your telephone. If your question has been answered you were seeing with yourself from the queue. Please press star one again, we will pause for a moment, while we compile the Q&A roster.

Looking forward to 2026. We are forecasting, an increase in earnings as we continue to leverage our scale unique value proposition and reliability to deliver for our stakeholders.

We are confident in our ability to drive value creation through both ibida growth and robust free cash flow generation.

Yeah.

Okay.

Our first question comes from Richard Carlson with Wells Fargo. Your line is open.

Curt Begle: The Americas, we'll see that North America being positive and offset initially by some of the South America comps, but evening out throughout the year.

Hey, good morning, guys, congrats on the progress and happy anniversary.

Okay. Thanks Richard.

Our priorities are clear: operational excellence, balance sheet strength, disciplined capital allocation, and strategic investment in growth opportunities. These actions position us to continue building long-term shareholder value while maintaining flexibility in a dynamic global environment.

So I actually I have several questions, but I'll ask the first one is a big one and then I'll get back in the queue for Ross, but I just wanted to dig in a little bit more to EBITDA and some of the.

Operator. Please open the line for questions.

Edward Brucker: Got it. That's helpful. The debt pay down for the term loan was a pleasant surprise. Would you be able to explain the rationale behind paying down that debt, and do you expect to use excess cash flow next year to do the same?

Puts and takes I think your range is plus five to plus 13. So what are some of the moving parts. There whats maybe the underlying volume assumptions mix price and things like that.

Thank you, ladies and gentlemen, if you have a question or a comment at this time, please press star 1. 1 on your telephone. If your question has been answered, you were to move yourself from the queue. Please press star 1 to 1 again, we will pause for a moment while we compile, our Q&A roster.

And then it seems like an awful lot of this is from ebay.

EBITDA margin expansion, so what's what's driving that thank you.

Our first question comes from Richard Carlson with Wells, Fargo, your line is open.

Yeah. Thanks, Thanks, Richard Thanks for the questions as we as we think about the guide for next year. The margin expansion is really the continued synergy realization that we've highlighted kind of throughout the year. It starts hitting more of a full run rate next year. So we've talked about kind of realizing 75% or 70% to 75% of the remaining.

Curt Begle: Yeah. Look, that was part of the capital allocation priorities that we've laid out, that we review with the board every quarter. That was just doing what we said we were going to do. At this point, we'll continue down that path with the focus on deleveraging, and making sure that we're appropriately managing our cash and liquidity. As you can appreciate, working with our vendors and negotiating the best terms that we possibly can, the best prices we possibly can, proving that we have a very sound and solid liquidity, and robust balance sheet. We'll continue to evaluate with our board of directors. We believe that at this point, we'll continue down the path of the focus on deleveraging and debt reduction.

Hey, good morning guys. Congrats on the progress and happy anniversary.

Hey, thanks. Richard.

Standing unrealized synergies next year as well as project core that we highlighted last.

Last quarter, so that will begin to ramp up here in the back half of Q1, and then we'll begin to get full realization in Q2, three and four so that's a lift on the EBIT side in terms of margin expansion in terms of the volumes.

Uh so I actually have several questions but I'll ask the first ones is a big 1 and then I'll get back in the queue for the rest but I just want to dig in a little bit more to ibid on some of the um the puts and takes. I think your your range is plus 5 to plus 13. So what are some of the the moving Parts there? What's uh you know, maybe the underlying volume assumptions, mix price, things like that. Uh and then it seems like an awful. Lot of this is from uh IBA to margin expansion. So what's what's driving that too. Thank you.

We're expecting sort of flattish for their overall.

For the overall business as we look at it today with some puts and takes between the regions.

And that's really the driving factors and so as you as you go to the bottom end of the range to the top in the range of volume is going to be kind of the outstanding question for US and is the reason for that a little bit wider range than you may expect Richard the other comment I would make as we've highlighted in previous calls and commented again on this quarter.

Operator: Thank you. One moment for our next question. Our next question comes from Richard Carlson with Wells Fargo. Your line is open.

Richard Carlson: Hey, guys. Thanks for the follow-up. Actually, just piggybacking on that last question with the deleveraging, of course, this is something you've been telling us that you plan on doing, but just wondering, based on where your stock price has been recently, did the thought of spending that cash on repurchases come up at all, or the thought of buying your debt in the open market?

Lapping some of the South America comps from prior year.

In the first two quarters and so thats been offset by some of the positive signals of growth that we're seeing in the U S and a cautious outlook on Europe.

Thank you one moment for our next question.

Curt Begle: Yeah, Richard, thanks for the question. As I mentioned, this is something that we review every quarter with our board of directors. Certainly, it's a part of the conversation. Again, for us, we continue to believe that sticking to our original plan of debt reduction, as we talked about before, this is an opportunity for us to do what we say we're going to do and focus on the deleveraging portion. In terms of buying back debt, I would say I'm not really in a position to answer that other than I can fall back on the fact that we continue to keep all of those discussions in front of our board of directors and have robust dialogue each quarter.

Yeah, thanks. Thanks Richard. Thanks for the questions as we as we think about the guide for next year. Um the margin expansion is really you know the continued Synergy realization that we've highlighted kind of throughout the year. It it starts hitting more of a full run rate next year. So we've talked about kind of realizing 75% or 70 to 75% of the remaining outstanding unrealized synergies next year as well as project core that we highlighted um last quarter. So that that will begin to ramp up here in the back half of q1 and then we'll begin to get full realization in Q2 3 and 4. So that that's, that's the lift on the ibida side in terms of margin expansion in terms of the volumes, uh, you know, we're we're expecting sort of flattish for the overall, um, for the overall business. As we look at it today with some puts and takes between the regions. Um, and and that's, that's really the, the driving factors. And so, as you, as you go to the bottom end of the range with the top top end of the range, volume is going to be kind of the outstanding question for us and is the reason for the little bit wider range than you may expect.

Our next question comes from Kevin Mccarthy with vertical research partners. Your line is open.

Yes, Thank you and good morning, everyone.

Curt in listening to your prepared remarks, it sounds like you're having some success here in bid season can you just elaborate on.

Where youre targeting share gains and having success and maybe just put that into the context of.

Um in the first 2 quarters. And so that's being you know, offset by some of the, you know, positive signals of growth that we're seeing and uh the US and a cautious outlook on Europe.

What you see unfolding mix wise within the portfolio in 2006, and and the volume trends.

Thank you. 1 moment for our next question.

Foresee globally.

Our next question comes from, Kevin McCarthy, with vertical, research Partners your line is open.

Yeah. Thanks, Kevin I appreciate you joining.

Richard Carlson: Understood. A couple of modeling questions, Jim. I think D&A was down quite a bit in the fourth quarter. How should we think about that? Is this the new run rate going forward, or is that just some catch-up to end the year? I don't think there was a share count in your press release. Is it safe to assume it was flat quarter over quarter?

As we've talked about historically.

We had going into this year, obviously, there were contracts that we needed to see through and then we needed to understand from a cost profile.

Differentiation, where we stood from an organization as we realized synergies and make sure that we were getting the value for the products that we were selling also maximizing.

Jim Till: Yeah, the share count was flat. Correct on that. For the DNA, look at the year-to-date. There was just a purchase accounting finalization that got caught up for the year, as you highlighted. I'd look at our year-to-date number as a better representative of the go forward.

Yes, thank you and good morning, everyone. Um, Kurt and listening to your prepared remarks. It, it sounds like you're having some success here in bid season. Can you just elaborate on, you know, where you're you're targeting? Share gains. Uh, and and having success, and maybe just put that into the context of, um,

Throughput and output on our most contemporary line so as we've gone through the season, and we're probably 70% to 75% through.

You know what, you see unfolding mix wise within the portfolio and in 26 and and the volume Trends um that you see for C globally.

Typically some of those carries into Q1 or Q2 of our fiscal year.

Richard Carlson: Got it. Just one more, if I could squeeze it in. CapEx is running in line with what you guys have been telling us for a year now. I guess we're still just a little wondering if that 2% to 3% of sales, how long does that last, and are you able to properly capitalize a business at that level? I think there was a mention of eventually stepping that up a little bit. I guess maybe just remind us, maybe from what you told us a year ago, as far as how you see your CapEx projecting over a multi-year period.

We feel very good about how we position not only our ability to service our customers as you can imagine when theres a large combination of this size what are the risks that a customer may see as how will they be treated and we'll be able to deliver for them.

The quality and service that they deserve and expect and I'm very proud of what the group's been able to accomplish so that that certainly provided us.

Yeah, thanks Kevin. Appreciate you joining. Um, you know, as as we've talked about historically, uh, you know, we had going into this year obviously. There were contracts that we needed to see through and then we needed to understand from a cause profile and, uh, a differentiation where we stood, uh, from an organization as we'd realize synergies and and make sure that we were getting the value for the products that we were selling. Also maximizing uh, throughput and output on, you know, our most contemporary lines. So as we've uh, gone through

With the right discussions at the highest levels inside of those organizations and I will say that all of our customers are living in a very competitive environment as well so finding ways to help them.

Curt Begle: Yeah, thanks. Very good question. Again, coming into the combination of the two organizations, we had the opportunity to review and do a number of site visits. There was, I think, some expectation that plants or sites or lines were undercapitalized, and that certainly wasn't the case. We felt very comfortable coming into the year that we both had well-capitalized facilities, well-capitalized businesses. The one thing that we've been able to put into our overall spending discipline is the capital committee that we have internally that reviews projects, both on standalone from an ROIC standpoint, but also our maintenance and our safety CapEx, which I will tell you with 100% certainty, we've not sacrificed in any of those areas. The normal maintenance, PM programs, site maintenance, but more importantly, the safety, guarding, etc., is the top priority.

Optimize their cost structure, but more importantly provide some differentiated features through products such as elimination in some of our soft applications within the nonwoven segment.

Is really giving a good mix lift, particularly in our personal care side.

Seeing healthcare recover a little bit as well, which is a positive signal.

Some cases seen some growth in geographies that we hadn't historically.

Looked at and that's been a good job by our sales forces across the globe.

And we look at consumer solutions, we commented on the fact that the mix of our portfolio shifting from 51% to 53% in consumer solutions as you look at.

It's difficult sometimes to see the forest through the trees and so.

The season. And, and, you know, we're we're probably 70 to 75% through, um, you know, typically, some of this carries into q1 or Q2 of of our fiscal year. Um, you know, we feel very good about how we position, not only our ability to service our customers as you can imagine. When there's a large combination of this size, uh, 1 of the, you know, risks that a customer may see, is how will they be treated? And will we be able to deliver for them, uh, with, with the quality and service that they, they deserve and expect, and I very proud of what the group's been able to accomplish. So that that certain provided us, um, you know, with, with the right discussions at the highest levels inside of those organizations. And I will say that, you know, all of our customers are living in a very competitive environment, as well. So finding ways to help, uh, them, uh, optimize, you know, their cost structure but more importantly, provide some differentiated features, you know, through products, such as lamination and some of our, uh, soft uh, applications within the non-woven segment. Uh, is really giving a a good mix lift, uh, particularly

We try to really bucket those into major segments, we've talked about wipes, we have a great franchise inside of our consumer solutions space both of our own branded products for dry wipes that goes into institutional services and distribution channels with Sentara and Chicopee, but also as you look at our.

Curt Begle: As you look at growth projects inside of the businesses as well, we have a large fleet of contemporary assets, and also niche assets. Our ability to upgrade some of those lines falls within the CapEx spend, where we're not having to go out and buy a new line for $50 or $90 million. We can take with what we have and provide that. The other thing that has been really good work by the team is understanding where we had like vendors for things such as belts on our lines that we processed through every year from an expense standpoint, but also from spare parts on the capital side. Lining up vendors on that front, coordinating that with our procurement team, and making sure that, again, offsetting that inflation that normally takes place in equipment supply, the team's done an excellent job there.

<unk> portfolio globally within differentiated substrates inside of our portfolio, our spin <unk> technology continues to be preferred by the consumer in.

In our personal care side. Uh, we're seeing Health Care recovery a little bit as well, which is a positive signal. And uh, in some cases, uh, seeing some growth in in geographies that uh, we we hadn't historically, you know, looked at. And and that's been a good job by our sales force as the globe. Uh, and we look at consumer Solutions, you know, we comment on the fact that the mix um, of our portfolio shifting, you know, from 51 to 53 and consumer Solutions. You know, as you look at, you know,

A great product and delivery for our customers as well as we round out with air Laden spun laced technologies, which I think you'll have a little bit of an idea on how that <unk> had a chance to visit one of the sites.

So we're able to kind of capture general surface cleaning.

Personal care cleaning and then also the institutional dry wipes goods. So we're excited about that I talked about electrification initiatives, our cable wrap business continues to build momentum.

Curt Begle: In terms of the foreseeable future, as we've highlighted before, there will be a time that we'll pivot to large growth investments, new lines as the market warrants it, and as we pick our places to put that capacity. It goes back to our initiatives with Project Core, prioritizing where we're going to spend that CapEx, where we have the greatest, what business has the greatest right to win, opportunity to win, and take care of our sites, and ultimately the safety of our employees.

Through projects Green energy projects and high voltage cable needs.

That product line. We believe is again another great niche application, where we have some unique value propositions there.

And then on the infrastructure side well.

You may see some.

Some softness in different parts of the world.

Part of our portfolio is not just the building construction wrap but it's some of the other products that we've highlighted as a nice complement to.

It's it's difficult sometimes to see the forest through the trees, and so we, uh, we try to really bucket those into major segments. We talked about Wipes, we have a great franchise inside of our consumer Solutions space both our own branded uh products for dry wipes that goes into, you know, institutional services and and distribution Channels with senta and choppy. Uh, but, you know, also, as you look at our broad portfolio globally within, you know, differentiated substrates, uh, inside of our portfolio, our spin lace, technology, continues to be preferred by the consumer and, and uh, a, a great, uh, product and and Delivery for our customers, uh, as well as we round out with, you know, are laid and spun lace Technologies, which I I think you have a little bit of an idea now that you've had a chance to visit 1 of the sites. Um so we're able to kind of capture, you know, General surface cleaning, uh General Personal Care cleaning uh and then also the institutional dry wipes good. So we're excited about that. You know, I talked to

To those kind of total systems solutions for contractors and various distributors alike. So we continue to lean in on that front.

Operator: Thank you. One moment for our next question. Our next question comes from Kevin McCarthy with Vertical Research Partners. Your line is open.

I don't want I'd be remiss, if I didn't talk about some of the filtration projects, we have particularly in we think about the beverage space.

Kevin McCarthy: Yes, thank you. Appreciate you taking the follow-up. I just wonder if you could review and elaborate on the integration process, maybe provide a little bit more color on what you've accomplished to date and what still lies ahead for fiscal 2026 with regard to procurement, G&A, and on the operational side as well. Any additional color there would be helpful.

About electrification, uh, initiatives, our cable wrap business, uh, continues to, to build momentum, uh, you know, through you know, projects, green energy, projects, and high voltage cable needs. Uh, that, that product line. You know, we believe is again another great Niche application. Where we have some unique value, propositions there.

The one thing that we've really grown to appreciate over the past year is how significant.

And how trusted.

The sites that we had acquired are in that space are very high quality demands as you can expect.

But more importantly, our ability to service and deliver for those customers.

We really.

Curt Begle: No, thanks, Kevin. As we talked about early on, culture is a big thing, right? Putting organizations together and identifying the Magnera culture and then implementing that is a day-to-day job, making sure that we're touching and getting our 9,000 employees walking lockstep with us. That journey will continue on, and employee engagement is going to continue to be a main focus for us going into 2026 and beyond. Again, good momentum from that front. Great work from the HR team on benefits and things like that as we peeled off of the need for some of the transition services agreement with Berry. The procurement team is well ahead from where we had anticipated.

I'd ourselves on and look to continue to improve in certain areas and then theres demands on being on the front end of the ever changing needs in the markets on <unk> opportunities and addressing.

The customers' requirements from their ESG metrics, but more importantly, the safety and security of the products that they are putting in the market make no mistake across the board. We are we have to maintain the highest quality levels highest service levels not only of who we are who we do business with.

But the applications the end use applications that we supply to we are touching skin. We are we are in the operating room, we're protecting babies adults et cetera, and thats something that we take very seriously but.

But also something that again is differentiation for us in our space that again can be very competitive at times, but we are the trusted and reliable player in the geographies that we serve.

Curt Begle: We've staffed that organization well with very key talent, done a fantastic job of really taking on the reins and going out and making sure that we're getting our best cost analysis, and coordinating that with our innovation team. Good progress made there. As I think we highlighted in the script or in the call, we're already seeing a little bit of that. We've experienced some of that procurement savings in Q4, a little bit in Q3, and that run rate coming into this year as part of our overall walk and range. We continue to build momentum, and we continue to increase that pipeline. We're going to be moving away from, hey, this is the synergy realization, to just the savings programs and productivity savings that we look for every year.

Thank you for that color Kurt My second question relates to free cash flow.

I thought you did a nice job generating cash and deleveraging in the quarter.

Grown to appreciate over the past year is how significant um, and and how trusted uh, the sites that that we had acquired are in that space. Uh, very high quality demands as you can expect, uh, but more importantly, our ability to service and and deliver for those customers it's something that that we really, uh, pride ourselves on and, and look to uh, continue to improve in certain areas and then there's demands on being on the front end of, uh, the ever-changing needs and in the markets on compostable opportunities, and addressing, uh, the customers requirements from their ESG metrics. But more importantly, the safety and, uh, security of the products that they're putting in the market. Make no mistake, you know, across the board. We are, we have to maintain the highest quality levels highest service levels. Not only of who we who we do business with, uh, but the applications the end-use applications that we Supply to we are touching skin. We are

Specifically could you unpack the forward looking free cash flow range of 90 million to $110 million in 2026, just looking for.

Your thoughts on.

Things like cash costs for integration and project core what Youre baking in for working capital cash taxes and other items you may care to call out.

We are we are in the operating room. Um, we are protecting babies adults Etc and and that's something that we take very seriously, uh, but also something that again is, is differentiation for us in a space. That again, can be very competitive at times. But we are the trusted, uh, and reliable player in the geographies that we serve.

Curt Begle: The one thing that I would say that we've made also good progress on is just understanding and really putting together the right key operating metrics that we've populated throughout the organization. Some facilities are further along than others. As we're ramping them up and they're looking at the metrics that make the most sense for our business, that's been encouraging to see, again, the engagement, not only from the shop floor itself, but the entire team, especially when you can see some of the benefits of the run rate. Project Core is certainly something that has a lot of attention on it internally. We review that quite frequently, and it does, as a reminder, impact all regions, with the exception of Asia. The purpose of that, again, from the capacity optimization standpoint, is the work that was done throughout this year.

Sure. Thanks, Kevin.

Absolutely so win.

Obviously, you start at the top of the house with EBITDA and then we've highlighted the $80 million of capital expenditures, which includes $10 million of <unk> related integration costs.

On the on the integration and tax question, there is roughly $20 million of core.

And then we have in the range of $30 million to $35 million for cash taxes, we've sort of highlighted that 10% 11% of EBITDA, but we have some projects. We think can offset that next year to help help lower that number a little bit and then the remaining is just our normal integration as we're in year two.

Thank you for that caller. Kurt uh my second question, relates to free cash flow. Uh, I thought you did a nice job, generating cash and deleveraging in the quarter, uh, specifically. Uh, can you unpack the forward-looking free cash flow range of 90 million to 110 million in 2026, just looking for, um, your thoughts on uh, things like cash costs for integration and project core. Uh, what you're baking in for working capital, cash taxes, and and other items, you may care to call out

Of of Us sort of a three year path and so that overall total of that category is roughly $80 million and we highlighted that on slide 12 to help you with the walks.

Curt Begle: We talked about the ability to cross-qualify not only other raw materials with competing vendors, but more importantly, building flexibility in our network to be able to shift product from one asset, one site to another to make sure that we're getting the appropriate load that's a benefit to the customer, but it provides us with the lowest cost scenario. As we continue to progress on the separation with the TSA needs, transition services agreement with Amcor, Berry Amcor now, we're going to be doing that through the systems changes throughout this year. I would say that we're well ahead of schedule in terms of what our expectations were coming into the combination, and encouraged by what we've seen over the course of the last month.

Okay.

Working capital and expect it to be.

Smallish number or how would you care to characterize that.

I apologize alright, and working capital we assume flat we have some items that were came in at the end of the quarter. This year there were one time benefits.

Roughly $10 million of that benefit will offset in next year.

But we do have some we do have some items as we go off of legacy <unk> terms. The remaining portion of that should offset that so we've assumed flat for next year.

Sure, thanks Kevin. Um, uh, absolutely. So when you know, obviously you start at the top of the house with the IBA, um, and then we've we've highlighted the 80 million of capital expenditures which includes 10 million of it related integration costs. Um, when it on the on the integration and tax question, there's roughly, 20 million of core. Um, and then we have in the range of 30 to 35 million for cash taxes. We've sort of highlighted that 10 to 11% of ibida, but we have some projects. We we think can offset that um, next year to help help lower that number a little bit. Um, and then the remaining is just our normal integration is we're we're in year 2 um of of a sort of a 3 year path. And so that the overall total of that category is roughly 800 million and we've highlighted that on slide 12 to help you with the walks.

Excellent Thanks, and good luck to you guys.

Thanks, Kevin Thanks, Kevin.

One moment for our next question.

Okay, and it is working capital. Uh, Jim expected to be a a smallish number. How would you characterize that?

Yeah.

Our next question comes from Roger Spitz with Bank of America. Your line is open.

And good morning.

Maybe I missed it but for fiscal 2025 overall on a pro forma basis, what was the volume growth.

Kevin McCarthy: Thank you very much.

Curt Begle: Sure.

Operator: I'm not showing any further questions at this time. I'd like to turn the call back to Curt Begley for any further remarks.

Yeah. Thanks, Roger I think we finished right about 3% negative three 5% and that was for.

Curt Begle: We appreciate everybody joining the call today and your interest in Magnera. We continue to be very excited about the business, the future. Despite all the noise that goes on throughout the world, we're in a great position from having the best products and best capabilities to service not only our customers, but the end consumer as we continue to protect the world. I look forward to speaking to many of you through our investment calls and investor calls, as well as some of the investor conferences coming up. Everybody have a great day, and we look forward to connecting on our next quarter earnings call.

I apologize right and working capital. We we assume flat. Um, we have some items that were came in at the end of the quarter this year. Um, there were 1 time benefits, um, uh, roughly 10 million of that benefit will will offset in next year. Um, but we do have some, we do have some items as we go off of Legacy. GLT terms, the remaining portion that should offset that. So we was assumed flat for next year.

For the Americas.

Excellent. Thanks and good luck to you guys.

The decline was really.

Thanks. Kevin. Thanks. Kevin.

Because of the South America challenges that we face from competitive standpoint.

1 moment for our next question.

And then Europe was roughly 4% so.

Our next question comes from Roger Spitz with Bank of America, your line is open.

In total tonnage sold.

About the 354% negative for the year.

Got it and then.

Four.

I'm thinking about.

Thank you and good morning. Uh, uh, maybe I missed it but for fiscal 2025 overall, on a pro forma basis. What was the volume? Uh, growth?

Fiscal 2026, you were up 9% year over year, how should we think about the quarterly tempo of outperforming.

Operator: Thank you, ladies and gentlemen. This does conclude today's presentation. We thank you for your participation, and you may now disconnect and have a wonderful day.

2025 fiscal quarters.

Yes, so we don't provide quarterly details, but what I will tell you as we've highlighted.

We are we aren't a good trajectory in terms of the synergy realization on the procurement side I'm really proud of what the group.

Yeah. Thanks, Roger. I think we finished right about 3%, negative 3 and a half percent. And that was uh for for the Americas, you know, the the decline was really um because of the South America challenges that we had faced from competitive standpoint uh and then Europe was roughly 4%. So uh in total uh tonnage sold. Uh write about the 3 and a half 4% negative for the year.

The team has been able to do from offsetting the standalone costs from the SG&A front, we continued to make good progress just from our overall opex programs inside of the facilities to offset other inflation.

But it project core as we've communicated we will continue to ramp up throughout the year, we're going to see most of that benefit come.

Got it. And then um for think about uh fiscal 2026, uh you're up 9% year-over-year. How should we think about the quarterly tempo of outperforming uh, the 2025 fiscal quarters?

In Q3, Q4, but we will see that phased in.

A little bit of an impact this quarter and in Q2.

So that's in terms of what we see not a tremendous hockey stick going into next year, but in general.

South America is the big kind of initial lap that we have for Q1 Q2, just because of the.

Because of the business that we were we were doing last year and we've highlighted that in previous quarters and that was that.

Those are the negotiations that are taking place right now and we feel like we're very well positioned.

Into 2026 back half of 2026 in particular.

Thank you very much.

Sure.

One moment for our next question.

Yeah.

Our next question comes from Edward broker with Barclays. Your line is open.

Hey, thanks for the questions and congrats on the quarter.

First one would you be able to just dive into into the demand environment sounds like you're being cautious.

Ah.

Given what we've seen from a bunch of other.

Thank you Jean companies, but is it is it something where its cyclical or the consumers just weaker Alan buying those products do you think theres anything more.

Side of the facilities to offset other inflation. Um, but project core. Uh as we have communicated will uh continue to ramp up throughout the year. We're going to see, you know, most of that benefit come uh, in in Q3 Q4. But we'll see that phased in and uh, in a little bit of an impact this quarter and and in Q2, uh, so that that's in terms of, you know what we see, you know, not a tremendous hockey stick going into the next year. But uh, in general, um, South America is the, the big kind of initial lap that we have, uh, for, you know, q1 Q2 just because of the, um, because of the business that we were we were doing last year and we, we've highlighted that in previous quarters and that was, um, those are those are the negotiations that are taking place right now and we feel like we're very well positioned, uh, going into, uh, 2026 about half of 2026 in particular.

Thank you very much.

Sure.

1 of them for our next question.

Structural going on.

Thanks for the question I mean, if you look at the portfolio that we have these are products that are needed everyday essential goods and products both on the disposable and durable side.

Our next question comes from Edward Brooker with barklay, your line is open.

Yes, we listen very intently and closely to our customers.

And even through various negotiations of what we can do to help them.

Secure business on the shelf, but find ways to cost reduce so that comes from a number of different areas, whether it's new materials that we can provide a new platform that we can run it on but also down gauging as they look for high performance materials.

Hey, uh, thanks for the questions and congrats on the, uh, on the quarter. The first 1, would you be able to just dive into into the demand environment? Sounds like you're, you're being cautious, which is prudent, uh, you know, given what we've seen from a bunch of other, uh, paper packaging companies, but is it, is it something where it's typical where the consumer is just, you know, weaker right now and buying those products.

Actually think there's something more, uh, structural going on.

Lighter weight, so that's been a major point of emphasis.

But in general I would say that.

The European market is certainly has more caution to it based on what Youre hearing what everybody is talking about in this space as we communicated before we sell to both branded and private label.

So again as consumers make choices on the shelf.

Where there the one one comment that I would make on the personal care front, there's always the concern about baby and where the birth rates are going to negatively impact. This business long term Fortunately for us we highlighted at our adult incontinence products continue to really expand in terms of the.

The acceptance rate and the need is.

Aging populations are going on across the world and when you when you talk about form fit and function. That's a really important part of our developments with our customers both from a discretion standpoint, but ultimately a performance standpoint I could go into a number of different chemistries. We just reviewed some ph levels in.

Uh, and thanks for the question. I mean, if you look at the portfolio that we have, these are products that are needed every day, essential goods and products, both of them disposal and durable side. Um, you know, yes. We we listen very intently and closely to our customers. Um, and even through, you know, various negotiations of of what we can do to help them, not only secure business on the Shelf, but, you know, find ways to cost reduced. So that comes from a number of different areas. Uh, whether it's, you know, new materials that we can provide a new platform that we can run it on. Uh, but also down gauging, you know, as they look for high performance materials at at lighter weight, so that's been a, a major point of emphasis. Um, but in general, I would say that, you know, uh, the European market is certainly has more caution to it. Uh, based on, you know, what you're hearing, what everybody is talking about in the space as we communicated before we sell to both branded and private label. Um, so again, as as consumers make choices on the Shelf, uh, you know, we're there, the 1 1 comment that I would make, you know, on the personal care front. You know, there's always the

Helping to avoid rashes and things like that but in terms of overall demand I would say consumption rates and <unk>.

Various product lines, maybe a little bit softer in certain geographies with little bit more positive demand and others and we see that.

Really by region, even in the South American markets, where we've had more challenging run from import price pressure, which we've highlighted what what our customers have I think grown to appreciate is our ability to service them.

concern about baby and and whether birth rates are going to negatively impact this business long term. Fortunately, for us, we highlighted it. Um, our adult incontinence products continue to uh, to really expand in terms of uh, the acceptance rate and and the need uh, as you know, aging populations are going on across the world. And when you when you talk about form fit and function, uh, that's a really important part of our

And be able to respond in very short order and so.

To service and take care of customers when they need us, but at the same time, making sure that we're getting the value for the products that we're manufacturing and selling so in general.

Asia, albeit small for us pretty stable.

Europe definitely some some concerns and it's why we provided some of that range and then the.

The Americas, and we will see that.

North America being positive and offset initially by some of the South America comps, but even in out throughout the year.

Got it that's helpful and then.

The debt pay down the term loan was it.

Wasn't surprised.

Would you be able to explain.

Developments with our customers. Uh, both from a discretion standpoint, but ultimately, a performance standpoint. I could go into, you know, a number of different chemistries. We just reviewed some pH levels and, and, and helping to avoid rashes things like that. But in terms of overall demand, I would say consumption rates, uh, in various product lines, maybe a little bit softer in certain geographies with, you know, a little bit more positive demand in others. And, and we see that uh, really by region, you know, even in the the South American markets, you know, where we've had, you know, more challenging run from import price pressure, uh, which we've highlighted, uh, what, what our customers have, you know, I think grown to appreciate, is our ability to service them, um, and be able to respond in very short order. And so we we, you know, we're there to to service and take care of customers when they need us. Uh, but at the same time, you know, making sure that we're getting the value for the products that we're manufacturing and selling. So in general, uh, you know, Asia all

Explain the rationale behind paying down debt.

Net debt and do you expect to use excess cash flow next year to do the same.

Yes look that was part of the capital.

Allocation.

Priorities that we've laid out that we have that we review with the board every quarter. So that was just doing what we said we were going to do.

At small for us uh, pretty stable, um Europe, you know, definitely some some concerns and and that's why we provided some of that range and then uh you know the Americas we'll see that um, North America being, you know, positive and and offset initially by some of the South America comps. But um, even and out throughout the year,

At this point, we'll continue down that path with the focus on deleveraging and making sure that we're appropriately managing our cash and liquidity as you can appreciate working with our vendors.

Got it, that's helpful. And then the The Debt Pay down the term loan was a was a poster prize.

And negotiating the best terms that we possibly can and the best prices, we possibly can proving that we have a very sound and solid.

Uh, would you be able to, uh, explain the rationale behind paying down, uh, that debt? And do you expect to use excess cash flow next year to do the same?

Liquidity and robust balance sheet and so we will continue to.

Evaluate with our board of directors, but we believe that.

At this point, we will continue down the path of the focus on deleveraging and debt reduction.

Thank you one moment for our next question.

Our next question comes from Richard Carlson with Wells Fargo. Your line is open.

Hey, guys. Thanks for the follow up and actually just piggybacking on that last question on the Delevering of course. This is something you've been telling us that you plan on doing but I'm just wondering based on where your stock price has been recently.

You know, at this point, we'll we'll continue down that path with a focus on deleveraging and making sure that we're properly managing our cash and liquidity, you know, as you can appreciate, you know, working with our vendors. Um, and, you know, you know, negotiating the best terms that we possibly can the best prices we possibly can proving that we have a, a very sound and solid um uh liquidity and robust balance sheet, and so we'll continue to

Auto spending that cash on repurchases come up at all.

Evaluate with our board of directors. But, you know, we believe that, uh, you know, at this point, we'll continue down the path of, uh, the focus on deleveraging and and debt reduction.

The thought of buying your debt.

Market.

Richard Thanks for the question as I mentioned this is something that we have.

Thank you. 1 moment for our next question.

We review every quarter with our board of directors.

Certainly, it's a part of the conversation.

Our next question comes from Richard Carlson with Boss, Fargo. Your line is open.

But again for US we continue to believe that.

Sticking to our original plan of debt reduction.

We've talked about before this is a.

An opportunity for us to do what we say, we're going to do and focus on the deleveraging portion in terms of <unk>.

Hey guys, thanks for the follow up uh and actually just to get you back on that. Last question with the ding of course this is something you've been telling us that you plan on doing but just wondering based on where your stock price has been recently. Did the thought of spending that cash on repurchases come up at all uh or the thought of buying your your debt in the open market.

Buying back debt.

I'm not really in a position to answer that other than I can fall back on the fact that we continue to keep.

All of those discussions in front of our board of directors and have robust dialogue each quarter.

Understood and then a couple of modeling questions. Jim I think DNA was down quite a bit in the fourth quarter.

How should we think about that is this the new run rate going forward or is that just some catch up in the year and then I don't think Theres a share count in your in your press release. So is it safe to assume it was flat quarter over quarter.

Yes, the share count is flat correct on that and then for the DNA guide to look at the year to date. There was some just a purchase accounting finalization that got caught up for the year as you highlighted so I look at our year to date number is a better representative of the go forward.

Yeah, Richard, thanks for the question. You know, as I mentioned, this is something that we have uh, we review every quarter with our board of directors. Um, and you know certainly it's a, you know, part of the conversation. Uh, but again for us, we continue to believe uh, that sticking to, you know, our original plan of of debt reduction, you know, as, as you know, we talked about before this is a an opportunity for us to, to do what we say we're going to do and, uh, focus on on the deleveraging portion, uh, in terms of, you know, buying back debt. Again, I, I, I would see, I'm, I'm not really in a position to answer that other than I, I can fall back on the fact that, uh, we continue to keep, you know, all of those discussions in front of our board of directors, uh, and have robust dialogue. Each quarter.

Got it and then just one more if I could squeeze it in Capex.

It's running in line with what you guys have been telling us for a year now.

But I guess, we're still just so I'm wondering if that 2% to 3% of sales how long does that last and are you're probably able to properly capitalize the business at that level. I think there was mention of eventually stepping that up a little bit, but I guess, maybe just remind us maybe from what you told us a year ago as far as how you see your capex projecting.

Understood and then a couple of modeling questions, Jim, I think DNA was down quite a bit in the fourth quarter. Um how should we think about that? Is this the new run rate going forward? Or is that just some some catch up to, to end of the year? And then I don't think there's a share count in your in your press release. So is it safe to assume it was flat a quarter of a quarter?

Over a multiyear period.

Thanks.

Very good question.

Yeah. The share count was flat uh correct on that. And then for the DNA uh guy look at the year to date, there was some just uh, purchase accounting finalization that got caught up for the year as you highlighted. So I'd look at our year to date number as a as a better representative of uh the go forward.

Good coming into.

The combination of the two organizations, we had the opportunity to review and do a number of site visits there was I think.

Some expectation that the plants are sites or lines were.

Undercapitalized and it certainly wasn't the case, we felt very comfortable coming into the year that we both had well capitalized facilities well capitalized businesses and so the one thing that we've been able to put into our our overall spending discipline as the capital Committee that we have internally that reviews projects both on Standalone.

Got it and then just 1 more. If I could squeeze it in, um, capex, uh, is running in line with what you guys have been telling us for a year now. Um, but I guess we're still just a little wondering if that that 2 to 3% of sales. How long does that last? And are you able to properly capitalize the business at that level? I think there was a mention of eventually stepping that up a little bit, but I guess maybe just remind us. Uh, maybe from what you told us a year ago, as far as how you see your your capex projecting uh, you know, over over a multi-year uh period.

Yeah, thanks. Uh, very good question. You know, we again coming into um,

From an ROIC standpoint, but also our maintenance and safety Capex, which I will tell you with 100% certainty we have not sacrificed any of those areas. So the normal maintenance PM programs site maintenance, but more importantly, the safety.

Guarding et cetera is the top priority.

As you look at growth projects inside of the businesses as well we have a large fleet of.

Contemporary assets and also niche assets and so our ability to.

Upgrade some of those lines falls within the Capex spend where we're not having to go out and buy a new line for $50 to $90 million, we can take with what we have.

And provide that.

The other thing that has been a really really good work by the teams understanding where we had like vendors for things such as belts on our lines.

You know, the, the combination of the 2 organizations, we had the opportunity to review and do a number of site visits, you know, there was, I, I think, you know, some expectation, that that plants or sights or lines were uh, under capitalized. And that, that certainly wasn't the case. We felt very comfortable coming into the year that we both had well capitalized facilities. Well, capitalized businesses. And so the 1 thing that, you know, we'd be able to put into, you know, our our overall spending discipline is the, you know, Capital committee that we have internally uh that reviews projects, you know, both on Standalone from an roic standpoint but also, you know, our maintenance and our safety capex, which I will tell you with 100% certainty. We've not sacrificed in any of those areas. So, you know, the normal maintenance PM, programs site maintenance, but more importantly the safety, um, you know, guarding Etc is the top priority. Um, as you look at growth projects and so

We process throughout the year from an expense standpoint, but also from spare parts on the capital side, so lining up vendors on that front and coordinating that with our procurement team and making sure that again offsetting that inflation that normally takes place in equipment supply. The team has done an excellent job there so in terms of the foreseeable future.

As we've highlighted before there will be a time that we will pivot to large growth.

Investments.

New lines as the market warrants it and as we pick our places to put that capacity, but it goes back to our initiatives with project core and prioritizing where we're going to spend that capex and where we have the greatest business has the greatest right to win opportunity to win and take care of.

Our sites and ultimately the safety of our employees.

Thank you one moment for our next question.

Our next question comes from Kevin Mccarthy with vertical research your line is open.

Yes. Thank you I appreciate you taking the follow up.

I'm wondering if you could review and elaborate on the integration process, maybe provide a little bit more color on.

What you've accomplished to date and what's still lies ahead for fiscal 2006 with regard to.

There. So, in terms of the foreseeable, you know, future as we've highlighted before, there will be a time that will pivot to large growth, um, Investments, uh, new lines as the market, uh warrants it. And and as we pick our places to to put that capacity. But you know, it goes back to, you know, our initiatives with project core and you know, prioritizing where we're going to spend that capex and where we have the greatest what what business has the greatest right to win uh opportunity to win and you know, take care of our our our sites and and ultimately the safety of our employees.

Procurement G&A.

On the operational side as well any any additional color there would be helpful.

Thank you. 1 moment for our next question.

Thanks, Kevin.

As we talked about early on culture is a big thing right and putting organizations together in identifying the magnetic culture and then implementing that is is a day to day job in making sure that we're touching and getting our 9000 employees walking lockstep with us.

Our next question comes from Kevin McCarthy with vertical, research, your line is open.

Yes, thank you. Uh appreciate you taking the follow-up. Um just wonder if you could review and elaborate on the integration process uh maybe provide a little bit more color on.

So that journey will continue on an employee engagement is going to continue to be a main focus for us going into 2026 and beyond but again good momentum from that front great work from the HR team on.

You know what you've accomplished to date and what still lies ahead for fiscal 2026. You know, with regard to, uh, procurement, G&A, uh, and on the operational side as well. Any additional color there would be helpful.

Benefits and things like that as we peeled off of.

The need for some of the transition services agreement with Berry. The procurement team is well ahead from where we had anticipated we've staffed that organization well.

With very key talent done a fantastic job of really taking taken on the reins and going out and making sure that we're getting.

Our best cost analysis, and coordinating that with our innovation teams. So good progress made there and as I think we highlighted in the script during the call.

We're already seeing a little bit of that we have experienced some of that procurement savings in Q4 little bit in Q3 and that run rate coming into this year as part of our overall work and range. So we continue to build momentum and we continue to increase that pipeline, we're going to be moving away from hey, This is the synergy realization to just the savings.

Programs and productivity savings that we look for every year. The one thing that I would say that we've made also good progress on is just understanding and really putting together the right key operating metrics that we've populated throughout the organization. Some facilities are further along than others.

No, thanks. Kevin. Uh, you know, as as we talked about early on culture is a big thing, right? And putting, you know, organizations together and identifying the magnetic culture. And then implementing that is is a day-to-day job and making sure that we're touching, you know, and getting our 9,000 employees walking lock step with us. Um, so you know, that Journey, you know, will continue on and and employ engagement is going to continue to be a main focus for us going into, uh, 2026 and Beyond. But again, good momentum from that, uh, front great work from the HR team on, you know, benefits and, and things like that as we peeled off of, um, uh, the, the, the need for, you know, some of the transition Services agreement with Barry, the procurement team is well, ahead from where we had anticipated, we've staffed that organization well, uh, with, you know, very key Talent, who've done a fantastic job of really taking, uh, taking on the Reigns and, and going out and and making sure that we're getting uh, you know, our our best

And so as we're ramping them up and they're looking at the metrics that make the most sense for our business.

That's been encouraging to see again the engagement not only.

From the from the shop floor itself, but the entire team, especially when you can see some of the benefits of the run rate.

You know, cost analysis and in coordinating that with our Innovation team. So good progress made there and is I think we highlighted in the the script or in the call. Um, you know, we'll, we'll we're already seeing a little bit of that. We we've experienced some of that, uh, procurement savings and, uh, Q4 a little bit in Q3 and that run rate coming into this year as part of our, you know, overall walk and and range. So we we continue to build momentum and we continue to increase that pipeline. We're going to be moving away from hey, this is the Synergy realization to just

<unk> core is certainly something that.

Has a lot of attention on it internally, we review that quite frequently and it does as a reminder, does impact all regions. The exception of Asia and the purpose of that again from the capacity optimization standpoint is the work that was done throughout this year and we talked about the ability to cross qualify not only other raw.

<unk> with.

Competing vendors, but more importantly building flexibility and our network to be able to shift product from one asset one site to another to make sure that we're getting the appropriate load that's a benefit to the customer, but it provides us with the lowest cost scenario and as we continue to progress on the separate.

<unk>.

With the TSA needs transition services agreement with.

Amcor, Barry Amcor now.

The savings programs and productivity savings uh, that we look for every year. The 1 thing that, you know, I would say that, uh, We've made also good progress on is just understanding and really putting together the right key operating metrics that we've, uh, populated throughout the organization, some facilities are further along than others. Uh, and so, you know, as we're ramping them up and they're, they're looking at the metrics that, uh, make the most sense for our business, uh, that's that's been encouraging to see again the engagement, not only, uh, from the, from the shop floor itself, but the entire team. Uh, especially when you can see some of the benefits of the Run rate, uh, project core, uh, is certainly something that, uh, has a lot of attention on it. Internally, we, you know, review that quite frequently and it does as a reminder, it does impact uh, all regions the exception of of Asia and and the purpose of that again from the capacity optimization standpoint, is the work that was done throughout this year and we talked about the ability to cross qualify not only

We're going to be doing that through the systems changes throughout this year and I would say that we're well.

Well ahead of schedule in terms of what our expectations were coming into the combination and encouraged by what we've seen.

Over the course of the last month.

Thank you very much.

Sure.

Yeah.

And im not showing any further questions at this time ill turn the call over to turn the call back to Kurt for any further remarks.

Well, we appreciate everybody joining the call today and your interest in <unk>, we continue to be very excited about.

other raw materials uh, with with uh, competing vendors, but more importantly, building flexibility in our Network to be able to shift product from 1 asset 1 site to another to make sure that we're getting the appropriate load that it's a benefit to the customer uh, but it but it provides us with the lowest cost scenario and as we continue to, you know, progress uh on the separation, um, with with with the TSA needs, uh, transition Services agreement with uh, Amcor Berry Amcor

The business the future and despite all the noise that goes on throughout the world. We're in.

We're in a great position from having the best products and best capabilities to service not only our customers, but the end consumers as we continue to protect the world look forward to speaking with many of you are through our investment calls and investor calls as well as some of the investor conferences coming up so everybody have a great day, and we look forward to connecting on our next quarter earnings.

Now uh we're you know, we're going to be doing that through the systems changes throughout this year. And I would say that we're uh well well ahead of schedule in terms of what our expectations were coming into the combination and encouraged by what we've seen uh in you know, over the course of the last month.

Thank you very much.

Sure.

And I'm not showing any further questions at this time. I'd like to turn the call over to turn the call back to Kurt Bagley for any further remarks.

Carl.

Thank you ladies and gentlemen, this does conclude today's presentation. We thank you for your participation you may now disconnect and have a wonderful day.

Despite you know, all the the noise that goes on throughout the world. Uh we're in, you know we're we're in a great position from having the the best products and and best capabilities to service, not only our customers, but the end consumer as we continue to protect the world uh look forward to speaking to many of you through our investment calls and uh investor calls as well as some of the investor conferences coming up. So everybody have a great day and we look forward to connecting uh, on our next quarter earnings call.

Thank you, ladies and gentlemen, this has conclude today's presentation. We thank you for your participation. You may now disconnect and have a wonderful day.